• Customer funds under management are up 3.4% at 46,695 million euros, thanks to a 6.1% increase in sight deposits.
• Performing loans have grown 6.6%, to 32,804 million euros, especially financing to the agri-food sector, companies and households.
• The capital ratio is up 0.2 percentage points at 15.9%, supported by strong equity growth, with eligible capital up 1.6% year-on-year. The phased-in CET 1 ratio has risen to 13.5% and the fully-loaded ratio to 13.3%, well in excess of regulatory requirements.
Thanks to the change of trend in the interest rate curve during the second half of the year and the growth of margins in the core banking business, Grupo Cooperativo Cajamar is once again able to build its income statement on recurring income from activities of a strictly banking nature. This, coupled with the positive trend in the business and good management of non-performing assets, has contributed to a significant improvement in asset quality and a reduction in the NPL ratio to 2.6% (below the industry average), while reinforcing coverage and provisions and boosting solvency.
As of the end of 2022, all the income statement margins have increased, without taking into account the net trading income (NTI) obtained as a result of the favourable trend in interest rates and the increase in sales activity. Thus, the yield on loans is up 11.5% year-on-year, facilitating a 4.5% increase in interest income, to 702.9 million euros. In addition, the 18.4% increase in net fee and commission income, to 270 million euros, thanks to increased disintermediation activity and cross-selling, helps lift the gross income (without NTI) to 972.2 million euros, an increase of 7.5% compared to the same period of the previous year. Despite the significant decline in net trading income (NTI), which is down 78.2% compared to the same period of the previous year, this item continues to contribute to gross margin. Specifically, NTI contributes 102 million euros, bringing the gross margin to 1,074.1 million euros.
Control and optimisation of operating expenses, which grew 1.4%, well below inflation, bring the efficiency ratio to 56.1% and net operating income (without NTI) to 369.5 million euros, which is 19.2% more than in the same quarter of the previous year.
As in previous years, in its income statement Grupo Cajamar continues to give priority to improving balance sheet quality by setting aside part of the period’s income, specifically 323.3 million euros, to cover impairment losses. After this allocation, consolidated net profit comes to 80 million euros, 27.7% more in year-on-year terms, in line with the Group’s forecasts.
Asset quality thus continues to improve, with a marked reduction in non-performing assets, including a decrease of 1,014 million euros in non-performing loans, which are down 22.7% compared to year-end 2021. Moreover, 62.8% of the non-performing loan book is less than 5 years old and so requires lower provisions for credit risk. As a result, the NPL ratio is down 1 percentage point at 2.6%, below the industry average. At the same time, net foreclosed assets are down 364 million euros, or 28.2%, compared to the previous year. Non-performing asset coverage is reinforced, bringing the NPL coverage ratio to 68.4% and the foreclosed asset coverage ratio to 66.1%, after the haircuts incurred in the foreclosure process.
The increase in sales activity has resulted in year-on-year growth of 6.5 % in total assets, to 62,314 million euros, and an increase in the total volume of business managed, now standing at 97,987 million euros.
Customer funds under management are up 1,550 million euros, or 3.4% year-on-year, at 46,695 million euros, mainly due to a 6.1% increase in sight deposits and a decrease in the impact of market volatility on the assets under management of investment funds and pension plans, which in Grupo Cajamar are down −0.9% and −4.1%, respectively, compared to industry averages of −3.6% and −10.2%.
Performing loans, meanwhile, are up 6.6%, at 36,543 million euros, most notably the financing granted to strategic sectors such as agri-food (+6.1%) and companies (+3.7%).
The Group’s loan book is notably diversified, with lending to households accounting for 35.2% of the total, companies 29.1% and the agri-food industry 18.5%. Furthermore, Grupo Cajamar allocates 38.6% of its business financing to the primary sector and its manufacturing arm, making it a benchmark in the sector, with a national market share of 15.4%.
Business growth throughout 2022 has led to a gradual but steady increase in the number of customers who have opted for the Cajamar cooperative banking model, which now has more than 3.7 million customers, and also to increases in the investment (now standing at 2.9%) and deposits (2.6%). The digital, electronic and mobile banking channels have more than one million digital customers, which is 8.1% more than in the same period of the previous year. Of this total, 578,000 are Bizum users, up 21.4% year on year. The Group also offers its customers and users a network of 1,514 proprietary ATMs.
Solvency and liquidity
Grupo Cooperativo Cajamar meets supervisory solvency and liquidity requirements with a comfortable margin. The capital ratio is up 0.2 percentage points at 15.9%, while the phased-in CET 1 ratio stands at 13.5% and the fully loaded ratio at 13.3%, with a surplus of 725 million and 776 million euros of CET1/AT1 capital above the regulatory minimum.
In line with its commitment to sustainable development, last September the Group issued its first ESG debt issue, consisting of 500 million euros of social senior preferred bonds to finance companies in the social economy and projects promoting economic and social development, in accordance with Grupo Cajamar’s Sustainable Bonds Framework. This issue helped push the MREL ratio to 20.5%, 2 percentage points above the requirement set by the supervisor for 1 January 2023.
At the same time, Grupo Cooperativo Cajamar maintains appropriate liquidity levels, with available liquid assets totalling 10,724 million euros, including both high-quality liquid assets (HQLA) and other discountable liquid assets and central bank deposits; in addition, it has mortgage covered bond issuance capacity of 4,472 million euros. It thus easily meets the limits set by the regulations, with a liquidity coverage ratio (LCR) of 148.8% and a net stable funding ratio (NSFR) of 128.5%.
In addition, the Cajamar cooperative banking group is gradually repaying the amount borrowed under the European Central Bank’s (ECB) TLTRO facility, which is down 35.1% compared to the previous year, at 6,765 million euros.
Grupo Cooperativo Cajamar’s 5,213 professionals provide financial services through 843 branches, including two newly opened branches in Conil de la Frontera (Cádiz) and Pontevedra, 30% of which are in towns with fewer than 5,000 inhabitants. It also has 173 agencies and 6 mobile branches (itinerant vehicles), through which it helps prevent further financial exclusion by continuing to provide face-to-face financial services in 219 small rural towns and villages.
Grupo Cooperativo Cajamar’s sales network has taken further steps to improve the service provided to elderly people and people with disabilities, both in person in its branches and agencies and through a toll-free number specifically for these customer groups. In addition, it offers special designs and new media and resources to facilitate access to its electronic banking services, apps and ATMs and has launched the Senior Digital School, through which Grupo Cajamar professionals inform and coach these customers in the use of the media and channels through which services are provided and offer them basic cybersecurity advice.
Sustainability is one of the key, enterprise-wide objectives pursued by the Cajamar cooperative banking group, whose strategy is oriented towards driving the creation of shared value in the short, medium and longer term; among other measures, it is carrying out an assessment of financial exposure to environmental risk. As of 31 December 2022, 28.8% of the Group’s loan book is associated with environmental mitigation activities and 28% with adaptation activities. The Group has also adopted intermediate decarbonisation targets in line with the Science Based Targets initiative, to achieve the goal of net zero greenhouse gas emissions from its activities by 2050. Accordingly, it is aligning its lending and investment portfolios to achieve this goal and will accompany its partners and clients with its products and services throughout the transition to a low-carbon economy. It has demonstrated its commitment by joining the Net-Zero Banking Alliance (NZBA), convened by the United Nations Environment Programme Finance Initiative (UNEP FI), of which the Group is a founding signatory.
In accordance with its payment flexibility policy, Grupo Cajamar promotes financial solutions for customers who have had or are having temporary difficulties as a result of rises in the cost of living and interest rates, or as a result of the pandemic. At the end of 2022, Banco de Crédito Social Cooperativo and Grupo Cooperativo Cajamar’s 18 rural savings banks confirmed their commitment to extending the existing Code of Good Practices and to the new Code of Good Practices on mortgage loans, which are aimed at specific groups of middle-income customers who have been particularly affected by the rise in interest rates. All the Group’s entities are thus working to facilitate access to housing for their members and customers in their areas of activity.
Grupo Cajamar also supports the agri-food sector with specialised financial products and services, as well as through specialised technical advice and training and knowledge transfer programmes to contribute to the development of sustainable agri-food activities and products. For this purpose, through the Plataforma Tierra, it promotes and drives actions aimed at innovation, digitalisation and sustainability in the agri-food sector, registering more than 589,000 visits and consultations in 2022. At the same time, it sponsors and carries out research, studies and trials in its experimental agronomic centres in Almería and Valencia, which held 96 knowledge transfer events, both face-to-face and online, attended by more than 9,400 people.
The Cajamar Innova high-tech water business incubator continues to support innovative companies and startups, with the aim of making projects that deliver effective water resource management solutions viable. To date, 65 initiatives have benefited from its aid programmes.
Grupo Cooperativo Cajamar is also present at international and national trade fairs, such as Fruit Logistica, Fruit Attraction, Alimentaria, Agroexpo and FIMA, accompanying agri-food companies to help them promote themselves and expand in Spain and abroad. It has participated in organising trade fairs, business forums and meetings, giving greater visibility to the challenges facing Spanish companies and the opportunities the Next Generation European funds offer them to modernise, innovate and make their businesses sustainable.
Grupo Cajamar also shares knowledge with the business world and society in general through new publications. In 2022, it added 192 publications and books, 292 articles and 48 economic reports on markets and subsectors, including the reports Sustainability indicators in the agri-food sector; Sustainable and innovative wine tourism; Success stories from around the world, which received an award from the International Organisation of Vine and Wine; and Observatory of the Spanish agri-food sector in the European context: 2021 Report.
Also in 2022, it published two new monographic studies in the Mediterráneo Económico collection: Rural Spain: remains and future opportunities and The labour and social integration of immigrants and refugees in Spain.
Based on all these actions, in 2022 Grupo Cooperativo Cajamar was recognised by CDP as a leading company for its corporate transparency and performance in the field of climate change, with an “A” leadership rating. In the area of human resources, it has been certified by the Great Place to Work consultancy as a Great Place to Work, on account of its professionals’ high level of trust in the organisation and its ability to attract and retain talent.